Within the blockchain world there are familiar names, Bitcoin and Ethereum of course, and others that are less widely known, but growing in recognition. One name that may garner more interest this year, and which is certainly worth paying attention to, is Cosmos, a high quality network that is substantially different from other projects, and which has enormous potential upside.
How Is Cosmos Different?
Cosmos aims to be something distinct, announcing itself as 'the internet of blockchains'. What this means is that within its network, instead of having many applications running on a central chain, each project can build its own, separate blockchain, and these are all then connected together.
Cosmos creates a system of interlinked, compatible chains, each of which can be constructed and operated according to the requirements of the application that it will power.
A core part of this system is the Cosmos SDK (software development kit), which is a framework for building individual, application-specific blockchains. Put all this together, and Cosmos is both a blockchain ecosystem and a development platform.
What Are the Advantages?
There are currently many competing blockchains, and this creates a chaotic environment. If you wanted to launch a decentralized application, you might opt to build on Ethereum or, increasingly, on one of the so-called Ethereum killers. Solana got a lot of traction last year, and Cardano is playing the long game, while Avalanche is also a strong contender, and there are many others to choose from.
Looking at this scenario, it becomes apparent that interoperability would be optimal, so that in place of separate, siloed entities that don’t interact, we would have a system in which chains link up and become components within a larger whole, while still maintaining their individual integrity.
And, that is what Cosmos is geared towards. By utilizing the Cosmos network, developers can create their own blockchains, but ensure that they are interconnected.
Cosmos can, perhaps, remove the clutter, and enable a shift into a clean, smoothly functioning web3 environment, helping to facilitate a digital ownership economy that is accessible and frictionless.
How Does It Work?
Integral to Cosmos is Tendermint. This is actually made up of two parts, Tendermint Core, its consensus engine, and ABCI, which stands for Application Blockchain Interface. This is where it gets technical, but essentially, Tendermint is an open-source protocol allowing developers to focus on the higher-level application layer, and build in any programming language.
The first blockchain that was launched in the Cosmos system is called the Cosmos Hub, and this is the primary mainchain connecting together with other components in the network.
The Cosmos SDK framework allows developers to create new blockchains that are interoperable. And, one other key term is the Inter-Blockchain Communication Protocol (IBC), the purpose of which is to facilitate cross-chain functionality.
The cosmos network’s coin is called ATOM. Holders can stake their ATOM for rewards, and in the process help to maintain the network.
From a less technical, more zoomed-out perspective, it is apparent that Cosmos aims towards flexibility, scaling, ease-of-development and interoperability.
The Ecosystem So Far
There are, at the time of writing, 262 apps and services running in the Cosmos ecosystem, including some big names that, if you are interested in cryptocurrencies, you have very likely heard of.
Scroll through the list, and you will find the likes of Terra, Binance Smart Chain, Crypto.com, Polygon and Oasis Foundation. Some of these names are more widely known than Cosmos itself, which underscores the potential of the network, as quietly and without excess hype, it is bringing together substantial development activity.
Osmosis
To get an idea of how efficiently Cosmos can work, and in particular how fast and inexpensive it is, Osmosis is a good place to start. Osmosis is an automated market maker DEX, meaning it is an entirely decentralized exchange that operates around smart contracts and liquidity pools.
Within the Cosmos network, it is the most popular DEX, connecting projects through the IBC, and utilizing its own OSMO token. Both Osmosis and Cosmos experienced healthy starts to the year, making gains when the rest of crypto was negotiating a bearish period, and the two tokens, OSMO and ATOM, look to be mutually lifting one another up.
There are several wallets that connect to Osmosis, with Keplr, a browser extension Cosmos wallet, being particularly easy to install and use. Once you have bought or traded some ATOM on an exchange, simply transfer it to Keplr, connect to Osmosis, and you will be able to deposit tokens and explore. There are high APR yield farming opportunities, but always be fully aware of the risks before participating.
Solving problems
Crypto is volatile, competitive and moves incredibly fast, so it is difficult to make confident predictions once you move away from the more established blockchains, and even with the major players, there is still an enormous amount of uncertainty.
That in mind, long-term projections on newer projects are highly speculative, but what can be said about Cosmos is that it is offering value and improvements in real-time, it operates smoothly, and the likelihood is that you will soon be hearing more about it.
